Stardock CEO Wants To Maximize Sales, Not Stop Piracy

from the he-understands-it dept

We have often questioned the intentions of those who try to fight and stop piracy at all costs. We have even raised the question in the past, "Which is more important, stopping piracy or increasing sales?" We are not alone in asking this question either. Some within the entertainment industry are asking it as well.

When Stardock was running Impulse, we got to hear a lot from companies regarding to their feelings towards software piracy. In many cases, it was clear that the motivation to stop piracy was less about maximizing sales and more about preventing people who didn't pay for the game from playing it. I felt this was misguided.

When I see our games pirated, it definitely annoys me. I put a lot of myself into our software and seeing someone "stealing" it is upsetting. But at the same time, the response to piracy should be, to paraphrase The Godfather, "Just business". Simply put, the goal should be to maximize sales, not worry about people who wouldn't buy your game in the first place. I've said this in the past but until we were digitally distributing third party games, I didn't realize how prevalent the "stop those pirates" philosophy was.

Brad certainly understands what the answer to that question is. He continues by explaining that there are two types of pirates, those that just want free stuff no matter what and underserved customers. Just as we have explained numerous times, it is pointless and counter productive to go after the former type of pirate. It is far more rewarding to actually serve those customers that are more than willing to give you money.

Just as we have seen Valve grow in markets around the world by serving those underserved customers, other game developers, as well as other content creators, can make more money and grow in their respective industries by doing the same. So stop wasting time and money fighting a losing battle. Take that time, effort and money and put it where it really matters, providing the best possible service for your customers as possible.

Good to know... But...

It feels good to know that some people understands. Businessmen everywhere should be like Mr. Wardell: knowing the difference between freeloaders and people who want the mercahndise but has no means to get it.

But is that any help? I mean will knowing that eventually correct the situation? Will knowing this will eventually mean people who are willing to pay get their goods? Will this mean that they will stop treating potential customers as thieves?

Seems to be the better approach.

I agree. Fighting piracy at all costs as part of your business model is idiotic. Going as far as Ubisoft and some other publishers have done starts hurting your legitimate long time customers. Your PC users are typically a bit more informed and it isn't that difficult to pirate stuff even for the novice. They just need to be smart about it and do a little research and not just download the first random link on thepiratebay or whatever.

Increasing sales should be the goal. Yes curbing piracy can be part of that of course. Trying to eliminate it is obviously not possible and misguided.

I haven't paid for a piece of software in ages. Sorry I am just one of those people now when I want something I don't even bother looking at a legal way to obtain it, its much easier to simply go download it from one of the private trackers or whatever. I used try to pay for programs after I tried them out, then several times I ran into issues with DRM, me using the license too many times (from changing hardware, reinstalling OS, etc), It was simpler to download a keygen or crack than it was to go through the legit means to get them to give me a new working key. So I quit bothering. So companies that do things of that nature turned me off to the whole business unfortunately for their whole industry.

I am fine with people thinking whatever they want about my activities. I read these types of articles all the time. I pirate for many reasons.. I can not buy the same quality, convince, etc as piracy usually offers me. Non DRM, commercial free TV shows within an hour of them airing without a limited annoying DVR box and cable service. Games that work offline with no issues like the Ubisoft games had. Videos that play on any device without any BS...

I am not saying I dont feel a tiny bit bad every so often, mainly about a small programmer with his own app or game, something like that here or there. Those are the ones I used to try to pay for. I often end up going open source when I can on those anyway.

I did pay for a few MMORPG games, since you are more or less forced to. They were well worth the money.

Now if we could get them to release a decent modern game all would be good. Although Sins of a Solar Empire was a good game, constantly releasing expansions to it is getting old. And that Elemental game was horrid. Where is Galactic Civ 3?

And why, of all companies, did they sell out their Impulse service to Game Stop? God, I hate that company. Refuse to purchase anything from them.

Dont be ignorant

It is obviously a numbers issue. They build in to their pricing what percentage the can pass on to legitimate buyers to absorb the revenue lost from piracy. If it was a huge amount they would spend the money to protect there asset and make sure it was profitable. Lets not fool ourselves into thinking he is cool with it.

Re: Dont be ignorant

funny, sins of a solar empire was one of the best selling games a few years ago and also one of the most pirated.....yet they didnt cry or complain, infact, the lack of DRM and Stardock being so cool about it, not forcing people to crack their games.

I know people who bought more then one copy and bought the game as gifts for that reason alone.....

when you take the attitude that most game developers take, trying to keep people from playing if they didnt pay, rather then worrying about simply maxamizing sales....not very smart....and clearly its worked so well...after all....copyright infringement is dead isnt it?

Re: Dont be ignorant

What is really interesting is that you describe normal operating procedures for just about any business. All businesses I know of add a certain amount of financial risk to their revenue calculations in order to cover unexpected losses or other factors that might effect their overall profit.

How big such a line item is for piracy differs from company to company. However, I would think that such a line item would be far smaller for a company like Stardock versus a company like Ubisoft that wastes a lot of resources fighting piracy. Stardock realizes that such effort is a waste of those resources as they are simply a drain. They don't bring in revenue and will thus always be a losing venture.

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I pay a grand total of $7.99 plus tax for my entertainment each month. That is for Netflix streaming. Everything else I watch is free over the air or on Hulu. Don't see any reason to pay any more than that. Plus it keeps me fully immersed in new stuff to watch.

Re: Re: The crystal ball game

Short term, this sounds like the happy kumbaya type solution - don't worry about piracy.

But the CEO fails to address what happens when everyone is playing pirated games, and nobody feels the need any longer to buy any game. The time they would have spent playing your game after paying is instead spent playing someone's pirated game for free.

Short term, you can look like a great guy by not addressing the issues, but in the long run, you face the erosion of the entire business model, which grinds it all to a halt.

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But the CEO fails to address what happens when everyone is playing pirated games, and nobody feels the need any longer to buy any game. The time they would have spent playing your game after paying is instead spent playing someone's pirated game for free.

Could be true... If everyone is actually a bloody pirate.

But no. Not everyone is a pirate. And how will pirates pirate the game if they don't actually buy it in the first place?

Plus pirated games have disadvantages: such as being barred from legal online servers if the game caters online multiplayer modes.

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You might find it surprising, but a lot of people aren't greedy twits. They understand that it cost money to make things and will actually pay for them when they think it's a fair offer. And even more so when they're treated like respectable customers rather than filthy pirates.

You might also find it surprising that Stardock isn't a bunch of hippies running running a software company off the back of a rundown turnip truck. Brad Wardell has been running Stardock since 1991, and has been in the game publishing biz since 2006.

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If you look at how much Stardock's products are pirated and how much Ubisoft's is pirated, they are pretty much comparable, though I don't even know why people would even want Ubisoft games...

Any DRM Ubisoft puts on their software does nothing to the actual number of people pirating their content, so what's the point of it?

Let's face it, no amount of "Anti-Piracy" measures has ever actually stemmed the flow of piracy. If piracy actually did cause the erosion of a business model like you said, you would have seen it by now, but you haven't.

Re: Re:

"Any DRM Ubisoft puts on their software does nothing to the actual number of people pirating their content, so what's the point of it?"

On my more cynical days, I presume that they just want to kill off PC gaming entirely, use piracy as an excuse and use that to force people to game on locked-down consoles that force people to buy overpriced digital content.

I try to have enough faith that nobody in charge of such a large company can be so stupid as to insist on systems that don't affect pirates in any way but lock out large chunks of their legitimate consumer base. So, if this isn't being done through stupidity, it has to be malice...

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But the CEO fails to address what happens when everyone is playing pirated games, and nobody feels the need any longer to buy any game.

A less bitter and twisted person without a 1-track mind might assume that, having been flexibly-minded enough to cope well with the current problem, he will again change his strategy and possibly even his product offering if and when the market changes.

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"the CEO fails to address what happens when everyone is playing pirated games, and nobody feels the need any longer to buy any game."

In your fantasy, will-never-happen scenario, I'm going to guess he'd be wondering why people are directly funding other peoples' games through Kickstarter and why Valve are continuing to make a profit on their "free" product instead of buying through the dated model he supports.

"The time they would have spent playing your game after paying is instead spent playing someone's pirated game for free."

Only in your bitter fantasy will this ever happen. Hint: when I choose to give my money to somebody else because you or your company is an asshole who treats me badly as a customer (hi Ubisoft & EA!), it's got nothing to do with piracy.

"Short term, you can look like a great guy by not addressing the issues, but in the long run, you face the erosion of the entire business model, which grinds it all to a halt."

The business model is based on market realities that no longer exist, or are quickly disappearing, which is why it's eroding. Addressing reality instead of whining about "piracy" is what he should be doing. Oh, he is? It's only the morons who refuse to change who are losing money? That's fine then...

Re:

Human nature must be such a bitch in the eyes of your responsible CEO. I mean, he must say to himself:

I know I'm a greedy bastard and if I can get something for free, I will (no matter how much work went into it) - therefore EVERYBODY ELSE has to be a greedy bastard, not willing to pay a fair price for the desired item if it can be had for free.

With such a mindset piracy remains a problem - forever. Although piracy isn't the problem, the mindset is...

Re:

One of the reasons I forwarded the newsletter to Mike is because Wardell goes though this in the newsletter.

As he says, the group that just want it free, your freetards, aren't buying no matter what he does so just write them off. Then he goes on to say that it's the underserved who "pirate" because they're pissed at the publisher (hello, Ubisoft) and they're the untapped market which they serve to earn them by doing just that. I'm not a gamer but from the product of theirs that I use, Fences, my experience is that they serve their market well. He also points out that the vast majority of us will pay for something we know has quality and value.

By writing off the pirates he's not wasting time going after people that won't buy no matter what. As for his eroding the entire business model of companies like Ubisoft, well if it does that then Ubisoft has no one but themselves to blame.

This isn't new for this company. They've been doing it for quite a while now. People still buy Stardock products and they suffer no more or less lost sales to "piracy" than do other game and utility companies.

If you notice the date, this newsletter came out just after the SOPA/PIPA black out.

I'm not much of a gamer so I have nothing to say about that end of their business. I do use Fences for Windows and it's delightful.

They have proven that given quality, value and service people will pay for product. To date, people haven't stopped buying, despite your apocalyptic view of humanity.

Perhaps it's you and whatever business model you are afraid will be eroded away are the ones who are wrong. Not Wardell.

Brad and his company will always get my money. A few years ago they released Elemental: War of Magic. The game ended up being a bug ridden pile of turd. January this year I got an email from Brad (I know it wasn't personally from him, but a bulk email) admitting the game was a pile of turd and since I pre-purchased it, Stardock was giving me a free copy of the follow up game Elemental: Fallen Enchantress.

I don't know how many other people got that offer and I don't really care. There aren't many other game developers/publishers who would admit their game was a pile of crap and then give you a free copy of the next game. But I'm supporting this one

I remember it broke my heart when Demigod came out and was pirated like crazy. The overload of pirated copies playing on the MP servers broke the backbone of the P2P system the game was using and led to alienating buyers and reviewers alike. They patched it so that pirated copies couldn't play on the MP servers anymore, but the damage was done by that point. The game garnered less than stellar reviews as a result and never really took off. It's good to see that experience didn't leave Stardock jaded to the topic of piracy.

Lean Principles

This is really what Lean principles are all about, and companies that follow them profit handsomely. The whole idea is to provide value to your customer. That value includes all kinds of things, of which price is only a part of the whole.

In the vast majority of cases if you provide a good value to someone they will pay you for it. Those people that refuse to pay, either do not value your goods or will never pay you, and thus are not your customers in the first place. So don't waste your time and efforts on your non-customers, because no matter what you do it will not increase you revenues. You should focus all your attention on your actual customers and what they value, so that they will gladly give you their money.

I agree whole-heartedly with this, I think it is the only sound approach to digital media. I'm not Stardock, I'm just one lone programmer with a handful of apps out in the world, and I do something that makes other developers' heads spin: I pirate my own products! I take my software, add an NFO file with instructions and an installation code (where applicable), and post it to torrent sites, Usenet, "Digital lockers" etc. What's wrong with my @$*#ing head ? Nothing! This actually helps me net more sales in the long run. Why ?

Because: Software pirates make up the oldest and largest social network of all time!

I have lost count of the times someone admitted they found my software on a torrent site, loved it and decided to pay for the next version, or their friend had pirated it and told them about it. I'm just one guy with a day job, writing commercial apps as a hobby. I don't have a million-dollar advertising budget, and I don't want one. I get better results for free, just by leaking a ZIP file to the internet.

Do you honestly believe Microsoft would dominate the PC operating system market today, had MS-DOS not been massively copied back in the '80s and '90s ? I remember the day DOS 6.0 was launched, people stood in line to buy it, then ran home to make copies for their friends and relativers. For every box sold, there were at least 5 or 10 copies made, if not more. We used to have "copy parties", where we would all meet up in someone's basement with piles of floppy disks and let our friends copy whatever they wanted. Microsoft didn't go bankrupt, they're the biggest software company in the world thanks to all that free distribution.

As a developer and CREATOR, I certainly want to earn a bit of money doing what I do, but I'm not so foolish to think everyone should begrudingly pay my asking price. I'll even go so far as to call it a "suggested price". There is no fixed, tangible cost associated to a copy. Whether my software is used by 10 people or 10,000 it's all the same to me. Heck, I've even donated cash to fellow programmers, just because I liked their software so goddamned much.

Another twist I'd like to share is my own consumption habits. Obviously, I know my way around the digital underworld. If something exists out there, I can probably find a cracked copy in about 30 seconds. I still don't mind paying for software if I consider it worth the money. Prime example: I downloaded Portal, and I liked it a lot. When Portal 2 was released last year, I signed up for Steam and bought a legal copy. In the 12 months since then, I've spent roughly $1500 on Steam games. I didn't have to, I could have gotten all of them from torrent sites, Usenet, DirectConnect or what-have-you. I could have saved myself $1500, but I didn't, because I wanted to pay. Some of them are old games I already had cracked, played through and beaten. I wanted to give money and show gratitude to the developers of those games for providing me great entertainment.

I wanted to use Steam because it offered a better experience than hunting through sketchy warez sites or having to download 2-3 different releases before finding one that actually works (stupid racers!). It was a service that provided what I wanted, when I wanted it (now), delivered the way I wanted (direct download). How hard was that ? I don't want to walk or bus to the mall, to buy a box with a shiny disc in it, that I still have to spend 30 minutes copying to my PC or console. I have this high-speed internet, USE IT. Steam does, and that makes me happy. A happy customer is a paying customer.

By most people's definitions, I'm an "evil pirate" because I can and do copy software. On the converse, I probably outspend 90% of gamers out there, and I'm not alone. There are others like me, we're not in it to get free stuff, we're simply adapting to the ever-changing tech landscape. I'm now trying to apply that same flexibility to the music world, hoping to launch a unique record label that embraces the very same idealistic attitude shown by Stardock and other online pioneers. We're not here to punish pirates, we're here to make money doing what we love. I don't love DRM and it doesn't make anyone money, except the crooked bastards who invent and license DRM schemes. I say, to HELL with those bastards!

Stardock the new weiner kid on the block

Stardock is full of shit, like any EA wannabe they want to get users to install DRM up their asses. Fuck any company that needs to write a friggen chapter on "DRM is awright because" shit. If you want to sell your crap go sell that crap and stop wasting peoples reading time. We don't need excuses, what we need is a world free of spyware and backdoors. How do we do that? Simple we don't buy digital litter that contains spyware/backdoors! There's not enough talent in the world that can justify property and privacy invasion period.